The budget is set against assumptions of a modest re-acceleration of activity in the global economy in 2014 compared to this year. A Government statement said in 2014, global activity was expected to grow by 3.6%. This is a result of a potential reduction in uncertainty relating to the fiscal crisis in the euro area and the United States, continuing monetary policy accommodation and gradually easier financial conditions.

The outlook for the PNG economy for 2014 remains positive, with Growth forecast to be 6.2% representing 14 consecutive years of economic growth. The growth is likely to occur despite the gradual winding down of the construction phase of the LNG project in the first half of 2014. In 2014 total revenue and grants are expected to be to be K12,688.5 Million, a growth of K2,206.9 Million or a 21% increase on 2013. This strong growth is driven by K750 Million in additional compliance efforts by the internal revenue commission and PNG customs, the sale of equity in PNG LNG (K600 Million) and underlying growth in nominal GDP. Total expenditure and net lending is estimated at K15,041.5 Milion growth of K1,829.2 Million or 13.8% increase on 2013. The growth in expenditure and net lending is largely driven by an increase in capital formation at the national department level increasing by K1,281.1 Million to K2,365.2 Million in 2014. Overall this will result in a defect of K2,353 Million or 5.9% of Gross Domestic Product (GDP) down from 7.9% in 2013.